Paul Holmgren was a 6th-round draft choice of the Philadelphia Flyers, taken 108th overall in the 1975 NHL Amateur Draft. He was also chosen in the fifth round, 67th overall, by the Edmonton Oilers in the 1974 WHA Amateur Draft.

He played with the University of Minnesota in 1974-75, where he scored ten goals and 31 points in 37 games, while spending 108 minutes in the penalty box. He turned pro the following year, opting to try his hand in the WHA with the Minnesota Fighting Saints, who had obtained his WHA rights. Playing at home was the key for Holmgren, who suited up for 51 games with the Saints, scoring 14 goals and 30 points. He also played a handful of games in the minors with the Richmond Robins of the AHL and the Johnstown Jets of the NAHL.

The experiment with the WHA was short-lived and Holmgren joined the Philadelphia Flyers when the Saints moved out of Minnesota. He played one game with the Flyers in 1975-76. The following year Holmgren dressed for 59 games, and the most noticeable statistic was his 201 minutes in penalties.

Holmgren certainly was the center of some controversial situations, including a six-game suspension for clubbing Carol Vadnais with his stick during a game against the New York Rangers. Advocates of Holmgren said he was simply an aggressive player, while those less charitable said he was nothing more than a goon. Holmgren landed himself in more trouble with the NHL when he took a swing at referee Andy Van Hellemond after a nasty on-ice incident with Pittsburgh's Paul Baxter. In Holmgren's eyes, he was angry that Van Hellemond had not called a penalty on Baxter, who had high-sticked Holmgren, leaving him unable to move his jaw for the better part of a week.

Holmgren remained with the Flyers for another six-and-a-half years, with his most productive offensive season coming in 1979-80 when he had 30 goals and 65 points to go along with his 267 minutes in penalties. That was also the year the Flyers went on their record 35-game unbeaten streak. They were the heavy favourites to win the Stanley Cup that year but were thwarted by the New York Islanders, who won the Stanley Cup in six games on Bobby Nystrom's overtime winning goal. Holmgren says he played the best hockey of his career that year, specifically in the playoff run, when he scored ten goals and ten assists in 18 games.

Late in the 1984-85 season, Holmgren was traded to the Minnesota North Stars, and although nobody likes being traded, it was a return to his home state, so he was quite happy with the move. Upon obtaining Holmgren, North Stars' general manager Lou Nanne called him "the glue we've sadly missed." Holmgren dressed for eleven games with the Stars that year, scoring seven points. In 1984-85, Holmgren was limited to just 16 games due to a serious shoulder injury. During the off-season he had reconstructive surgery, but the shoulder was not responding to treatment, and so, after eleven years in the NHL, Holmgren was forced to retire. He appeared in 527 NHL games, scoring 144 goals, 179 assists and 323 points while spending 1,684 minutes in the penalty box.

Although Holmgren never regretted the enforcer role he played in the NHL, the one incident he says he will always be sorry about was when he hit Van Hellemond in that game against Pittsburgh on December 9, 1981. "That's the worst thing I've ever done," Holmgren said. "I hope the people believe me when I say I'm sorry for what happened."

Following his playing career, Holmgren moved into the coaching ranks and served as an assistant coach with the Philadelphia Flyers for three seasons before being appointed head coach in 1988-89. Holmgren was the Flyers bench boss for the better part of four seasons before being replaced midway through the 1991-92 season. Prior to the start of the 1992-93 season, the Hartford Whalers hired Holmgren as their new head coach and position he held up until the early stages of the 1993-94 season. Following a short layoff focusing on his other duties as the team's general manager, Holmgren returned behind the Whalers bench in 1994-95 and spent two more seasons as the team's bench boss.